Forest Labs Inc. - FRX - close: 35.28 change: +0.13

Stop Loss: 33.25
Target(s): 39.00, 42.50
Current Option Gain/Loss: + 0.0%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Drug stocks have been a bright spot in the market with the DRG index showing plenty of relative strength. FRX just broke out to new two-year highs and has a chance to try and catch up with its peers. I am suggesting small bullish positions now or you can wait for a dip into the $34.50-34.00 zone. Our target is the $39.00 level and the $42.50 mark. We'll start with a stop loss at $33.25. FRX's point & figure chart has a triple-top breakout buy signal with a $53 target.

- Suggested Positions -

buy the June $37 call (FRX1118F37) current ask $0.75

- or -

buy the August $37 call (FRX1120H37) current ask $1.40

Annotated Chart:

Entry on May 20th at $ xx.xx
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume = 3.2 million
Listed on May 19th, 2011